Raytheon wins bid for Hughes
Friday 17 January 1997
General Motors, the parent of Hughes Electronics, accepted Raytheon's bid, worth $9.5bn (pounds 5.7bn), at a board meeting in New York. Raytheon's victory will propel it into the number three position among US defence contractors after Boeing and Lockheed Martin.
The announcement meant defeat for Northrop Grumman, the maker of the B-2 bomber, which had also joined the bidding contest. In the long term, the company may be forced into alliances of its own to survive, analysts say.
The takeover of the Hughes defence businesses will act as another spur to the restructuring of the European defence industry, which is well behind the pace set by leading contractors in the US. Last autumn Dick Evans, chief executive of British Aerospace, predicted the European industry would ultimately consolidate into a small core of big players, but said the process had become bogged down in national politics.
BAe's vision is of a single European holding company encompassing everything from missile technology and military jets to civil aircraft. Some progress has been made with the merger of BAe's missiles business with Matra of France and the ongoing merger of Dassault with Aerospatiale.
Raytheon is believed to have bolstered its position in the race for Hughes by its purchase earlier this month of the defence electronics component of Texas Instruments for about $3bn. The move created a better match between Raytheon and the Hughes businesses.
Raytheon hopes to close the deal within six months. The company is offering $5.1bn in stock and will assume $4.4bn in Hughes debt. The transaction will be submitted to approval votes among GM and Raytheon shareholders.
Raytheon said the combined company would have annual revenues of close to $21bn and a workforce of 127,000.
Any unfair competition issues that may be raised by US regulators would almost certainly focus on the missiles sector; Raytheon and Hughes Electronics have large missile businesses. As well as producing small aircraft and other defence products, Raytheon also has an important engineering consultancy division.
The Hughes sale will allow General Motors to concentrate on its core business of car-making. The remaining parts of Hughes, which General Motors may or may not choose to hold on to, will be focused on satellite communications and broadcasting.
Oxford is the least affordable city in the UK, where houses cost 11 times local salaries
Wellcome Image Awards: The most striking images from the world of science, including breast cancer cells under chemical attack and a photographer’s own kidney stone
Space debris orbiting Earth to be destroyed with giant lasers fired from Australia
Oscar Pistorius murder trial: Athlete repeatedly sick as court hears 'graphic details' of Reeva Steenkamp's post-mortem
How climate change helped Genghis Khan: Scientists believe a sudden period of warmer weather allowed the Mongols to invade with such success
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Poor 'live like animals' says Boris's privately educated sister after going on 'poverty safari'
Exclusive: Impact of immigrants on British workers ‘negligible’
Vince Cable: Teachers 'know absolutely nothing' about the world of work
Ukraine crisis: Russia pledges to 'retaliate against sanctions' as Ukrainian president says Crimea vote will not be recognised
The quiet diplomat: Catherine Ashton - recognised and admired in all the world’s troubled countries, yet ridiculed at home
- 1 Australian man Rod Sommerville reacts to bite from deadly snake by reaching for cold beer
- 2 Pakistan vs Paul Smith: Sandal-wearers bemused by famed British designer's attempts to sell traditional Peshawari chappal-style shoes for the distinctly untraditional sum of £300
- 3 North Korea elections: Kim Jong-un wins 100% of the vote
- 4 Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
- 5 Sharknado 2: Former WWE wrestler Kurt Angle to fight second wave of flying sharks
iJobs Money & Business
£1000 per month: Inspiring Interns: The company works with Tier 1 FTSE 100 Ban...
£35000 - £60000 per annum + Bonus + Benefits: Pro-Recruitment Group: You must ...
£60000 - £80000 per annum + BONUS + BENEFITS: Harrington Starr: A top, City ba...
VOLUNTARY ONLY - EXPENSES REIMBURSED : Reach Volunteering: Fantastic opportuni...